National Audit Office opens new investigation into grants awarded to Big Society Network

It wants to determine whether the issues it uncovered in its first review indicated 'wider systemic problems'

The National Audit Office has opened a fresh investigation into grants awarded to the Big Society Network in order to determine whether issues found in the first study indicated "wider systemic problems".

An NAO investigation published in July found that the Cabinet Office and the Big Lottery Fund had failed to follow their own procedures and guidelines in the management of more than £2m of grants awarded to the BSN and the Society Network Foundation, the charity that owns it.

The NAO said yesterday that it would open a new study into other grants awarded to the BSN and the SNF.

"This follow-up study will look at further grants given to the Big Society Network and the Society Network Foundation, and other related grants, to determine whether the issues found in the first investigation indicate wider systemic problems," said a statement from the NAO about the new study.

The move comes after an internal review at the innovation charity Nesta rejected claims that it was "forced" to provide funding for the BSN and the SNF.

Nesta was a non-departmental government body when it provided two grants totalling £480,000 to the BSN in 2010. It has since become an independent charity.

Liam Black, who was a Nesta trustee at the time, tweeted in July that the organisation was "forced to provide funding for the Big Society Network".

But a review of the grants, carried out by Geoff Mulgan, chief executive of Nesta since 2011, says that he could find no evidence that the award of the grants was influenced by government.

The review says that although the grants were risky and trustees were concerned about the BSN’s lack of a track record, they were made within Nesta’s procedures.

"I am satisfied that the claim that Nesta was forced to make grants to the BSN is incompatible with the available evidence," the review says. "While it is clear that Nesta was asked by Lord Wei (who was a government adviser) to consider supporting the BSN – that was in the context of Nesta as an NDPB working closely with the new government on a range of initiatives."

It says that Nesta rejected other proposals from the BSN for funding for other projects.

But it does say that Nesta "clearly did not want to antagonise a recently elected government by refusing any involvement in projects linked to its flagship big society programme, especially since these projects aligned closely with Nesta’s work before the election".

It says that Nesta would also have had some concerns about its future, because the government had announced its intention to abolish many NDPBs.

A statement from the trustees of the Society Network Foundation, which is in the process of being wound up, said: "We are surprised to be made aware of this latest NAO follow-up study this morning, particularly in light of the report published by Nesta on 13 October after a high-level review by its chief executive, Geoff Mulgan.

"It is for the National Audit Office to decide what it considers to be the most important areas of public expenditure to study and review, and ensure that these decisions are taken objectively and not in ways that raise concerns about political interference. We are now seeking clarification to establish the criteria that NAO initially used to undertake a review of certain SNF/BSN publicly funded projects and not others in their earlier review this year."

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